Debating Entitlements: Medicare’s Eligibility Age

(image by Evan Blaser)

It’s an election year. Politics and policy conversations –whether intelligent or not- seem to be everywhere. This election cycle we have heard quite a bit about the economy but surprisingly not much about entitlements – at least not since the Republican primary ended. This is surprising considering entitlement spending accounts for nearly half of the federal government’s budget.  That makes the issue an obvious channel for candidates to illustrate their particular politics on the role of government, government spending, and the economy. Not only that, but it is an issue that impacts every voter, whether they are retired, close to retirement, or paying taxes to fund others’ retirement. However, this election cycle, strangely enough, louder, more colorful topics have trumped the political arena and national conversation.

A hot topic or not, entitlement reform is a critical issue that desperately needs to be addressed now more than ever. With an estimated 10,000 baby boomers retiring daily, projections on entitlement spending are skyrocketing and no feasible solution has come close to getting the situation under control; current entitlement programs appear unsustainable.

One popular proposal for cutting back on entitlement costs is to increase the age of eligibility for Medicare and Social Security. In 1983 legislation was passed that gradually raised the social security eligibility age to 67 over time; however, Medicare eligibility for full benefits remains at 65. Many argue that it is well past the time for Medicare to follow suit. People are healthier longer and general life expectancy is climbing. Also Obamacare now makes it possible for people ages 65-69 to get private coverage. On the surface this seems like a logical step toward sustainability, but is it really?

Raising the Medicare eligibility age would not really save the federal government money overall, only shift expenses. Instead of paying for Medicare, the government would be paying increased Medicaid expenses and marketplace premiums. Not only that, but increasing the age will make the population on Medicare less healthy overall. Younger Medicare recipients are generally healthier than older recipients which means they are paying the same premium but consuming less of the costs. If the eligibility age is increased, the program will lose those premiums and still have relatively the same expenses. Therefore, while appearing to be a viable step towards a solution to the entitlement problem, raising the Medicare eligibility age as a means of cutting costs is really no solution at all. Instead it will increase overall government spending on healthcare and entitlements and leave the program just as doomed as before.

Does this mean we throw up our hands and give up? Of course not, it means we need to get smarter. It means we need to come back to the table and think of real solutions and find a way to make them happen.  

Carmen Weaver is a 1st year MPP Student at the College of William & Mary and an Associate Editor of the William & Mary Policy Review.

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